What is House Edge?

Whilst you may be familiar with the term ‘house edge’ or ‘house advantage’ from reading up on the subject of casinos, many people still do not fully understand it. Let me try and simplify:

House edge is a calculated percentage of advantage favouring the casino built into all casino games. It is the difference between the real odds of winning and odds you are paid out at.

Yes. I’ll say it again. All casino games incorporate a house edge. It’s how the casino makes money and why they don’t particularly care if a customer wins or loses. The phrase “the house always wins” is not just a catchy quote. Over time the casino always profits. They are moneymaking machines. You cannot argue with the mathematics. It is not a long, complex formula. It is actually very simple.

Casino Game Earnings = (Customer Wagers) x (House Edge)

I don’t dispute that it is certainly possible to walk out of a casino a winner. Many have. But should you keep returning then you would eventually lose. The house edge dictates so.

No casino based betting system is ever going to bring you long-term profits.

Come to terms with this and explore the alternatives. Such systems are basing their work on the aforementioned formula being wrong and claiming to have the insight to expose a flaw. They do not! They cannot. The fact is it’s simply not possible. In reality, using a casino game betting systems normally sees the user lose at the expected rate as defined through the figure of house edge. Do you really want to pay for a product that allows you to lose at the same rate that you’d lose anyway?

I’ve discussed why roulette systems are a scam in a previous post, but just to use the game as an example of how you will always be at a disadvantage against the casino let’s look at the mathematics:

A European Roulette table has one zero and 36 non-zero numbers. Of these non-zero numbers 18 are black and 18 red. If you are to place a bet of a single unit on black then your chances of winnings are 18/37 whilst your chances of losing are 19/37. The expected value of your bet could be calculated as follows:

(18/37 x 1) + (19/37 x -1) = 18/37 – 19/37 = -1/37 = -2.7%

The house edge is 2.7%. In playing 100 hands with a stake of 1 unit each time the house profit would be: 100 x 1 x 2.7% = 2.7

Regardless of whether it’s you playing or somebody else, as shown through the mathematics here, the house will always end up happier than its customers. There are games such as slots and keno that have much bigger house edge and games such as blackjack with a much smaller house edge.

Regardless, repeat betting will always guarantee a loss over time.

My advice? You should ONLY ever consider playing at a casino online in combination with a signup bonus offer where your expected value calculations based on the bonus amount and wagering requirements result in a positive figure. This however is still not risk-free.